Employee Benefits
Employee Benefits: Group Life and Health Insurance for Small Business
Employee benefits help small and midsize businesses hire and keep great people. Octans helps employers compare group life, accident, and supplemental health coverage that fits their budget and workforce.
Employee Benefits: What Octans Offers Employers
Our employee benefits team helps employers set up and review group term life, voluntary life, accident, hospital indemnity, and critical illness coverage. Many of these employee benefits can be employer-paid, employee-paid, or shared, which lets even very small businesses offer a meaningful package.
- Group term life is often one of the least expensive employee benefits to offer.
- Voluntary benefits let employees buy coverage at group rates through payroll.
- Benefits help with hiring and retention in a competitive market.
Table of Contents
Welcome to Your Employee Benefits Program
Understanding employee benefits is crucial for both employers and employees. Employee benefits are not just perks; they play a significant role in attracting and retaining talent. In today’s competitive job market, comprehensive benefits packages can set companies apart. Consider adding retirement plans, health insurances, and even wellness programs to enhance your offering. Providing these benefits demonstrates a commitment to employee well-being, which can improve morale and productivity.
Many organizations are now offering flexible benefits that allow employees to choose the options that best fit their lifestyles. This customization ensures that each employee can take advantage of the benefits they value most, whether that be childcare support, fitness memberships, or tuition reimbursement. This approach not only enhances employee satisfaction but also fosters loyalty, as employees feel more in control of their benefits.
In addition, companies can offer mental health resources, such as counseling services and stress management programs. Employee wellness is more than just physical health; mental well-being is equally important. Providing access to mental health resources shows employees that their employers care about their overall health, which can lead to a more engaged workforce.
It’s important to understand that employee benefits should evolve with the workforce. As new generations enter the job market, their expectations of benefits can vary significantly. For example, younger employees may prioritize benefits like student loan assistance and flexible working arrangements over traditional benefits. Keeping a pulse on what employees value can help organizations adapt their benefits offerings accordingly.
Furthermore, conducting regular surveys to assess employee satisfaction with current benefits can provide valuable insights. This feedback is crucial for making necessary adjustments. Transparency in how benefits packages are structured and communicated can also enhance employee trust and engagement. Keeping employees informed about their benefits helps them utilize these offerings effectively.
Another essential aspect is educating employees about the benefits available to them. Often, employees may not fully understand the options at their disposal or how to take advantage of them. Hosting informational sessions or creating detailed guides can help bridge this gap. When employees are well-informed, they are more likely to utilize the benefits provided, resulting in higher overall satisfaction.
Employers can also consider offering wellness incentives, such as gym memberships or health challenges. Incentives encourage employees to take an active role in their health, which can lead to lower healthcare costs for the company in the long run. Initiatives that promote a healthy lifestyle can foster a culture of wellness within the workplace.
As we move further into the digital age, technology can enhance how benefits are managed and accessed. Using benefits management software can simplify the process for both HR departments and employees. This technology can allow employees to easily track their benefits, enroll in new options, and even communicate directly with HR for questions or concerns.
Moreover, employers should also consider offering retirement planning services. Many employees are concerned about their financial futures and may benefit from guidance on retirement savings plans or investment options. Providing these resources not only supports employees in planning their financial futures but also reinforces the value the organization places on their long-term well-being.
To further engage employees, consider implementing a rewards program that recognizes employees for their achievements and contributions. This can include benefits such as additional paid time off, gift cards, or other incentives. Recognizing employee contributions fosters a positive work environment and can motivate others to put forth their best efforts.
Networking opportunities can also enhance employee benefits. By creating forums or groups for employees to share experiences and insights, organizations can foster a sense of community. These connections can lead to improved collaboration and teamwork within the organization, ultimately benefiting the company as a whole.
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Enhancing Your Health, Security & Peace of Mind
We’re excited to introduce you to a new suite of voluntary, supplemental benefits designed to support your health, well-being, and financial security
Whether you’re looking to save money on prescriptions, protect your family with portable life insurance, or simply explore your options with a licensed advisor, we’ve got you covered.
What’s Included:
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Policy Form Series ACC-2014
Policy Form ACC-2020-FL in FL
Policy Form ACC-2020-CO in CO
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Lastly, companies should continuously evaluate and adapt their benefits offerings. The business landscape is constantly changing, and so are employee needs and expectations. By staying informed about industry trends and competitor offerings, organizations can ensure they remain competitive in attracting top talent.
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Why These Benefits Matter:
- Affordable: Best Rates in the Market.
- Flexible: Choose what fits your life, with no pressure or obligation.
- Convenient: Everything can be done online or over the phone.
Ready to Get Started?
Look out for upcoming emails or schedule your virtual consultation today.
Let’s build a stronger, more secure future—together. Employee benefits are essential for creating a supportive workplace culture that values each individual’s contributions.
*Gerber Life Insurance is a trademark. Used under license from Société des Produits Nestlé S.A. and Gerber Products Company. Copyright ©2025 Gerber Life Insurance Company, White Plains, NY.
What employee benefits do small employers commonly offer?
The Bureau of Labor Statistics tracks this in its National Compensation Survey. The March 2026 release (published September 25, 2026) shows how many private industry workers have access to each benefit. The detail tables also split results by employer size.
| Benefit | All private workers | Establishments with 1 to 49 workers | 500 workers or more |
|---|---|---|---|
| Medical care | 71% | 55% | 90% |
| Retirement plans | 72% | 55% | 91% |
| Life insurance | 59% | 40% | 86% |
| Paid sick leave | 81% | 75% | 91% |
| Paid vacation | 80% | 71% | 91% |
| Paid holidays | 81% | 73% | 94% |
Sources: BLS tables for retirement, medical care, life insurance and paid leave, March 2026.
The biggest gap is life insurance. Only 40% of workers at the smallest employers have access, compared with 86% at large ones. Adding group life is one way a small business can close part of that gap with large competitors.
Small employers also trail on medical care and retirement plans, at 55% access each. Paid leave is the area where the gap is smallest. If you are building employee benefits from scratch, these numbers show what workers at larger firms already expect.
How much of the health premium do employers pay?
Sharing the cost is normal. The same BLS survey reports the average split of medical plan premiums between employer and employee in March 2026.
| Coverage and employer size | Employer share | Employee share |
|---|---|---|
| Single, all private workers | 80% | 20% |
| Single, 1 to 49 workers | 79% | 21% |
| Family, all private workers | 69% | 31% |
| Family, 1 to 49 workers | 64% | 36% |
Sources: BLS single coverage and family coverage tables. BLS reports percentage shares, not dollar premiums.
Hypothetical example. Say a single plan costs $600 a month. That premium is an assumption for illustration. At the small-employer average split, the business pays 79%: $600 × 0.79 = $474. The employee pays 21%: $600 × 0.21 = $126. Run the same math with your real quote to set a budget for employee benefits.
Do you have to offer health coverage? The 50-employee rule
The Affordable Care Act’s employer rules apply to “applicable large employers” (ALEs). The IRS defines an ALE as an employer with “at least 50 full-time employees, including full-time equivalent employees, on average during the prior year.”
- Full-time: at least 30 hours of service a week on average, or 130 hours in a month.
- Full-time equivalents (FTEs): add the monthly hours of non-full-time workers, counting no more than 120 hours per person, then divide by 120.
- Under 50: the employer is not an ALE for the year and is not subject to the employer shared responsibility rules.
Hypothetical example. A shop has 42 full-time workers and 12 part-timers who each work 80 hours a month, every month. Part-time hours: 12 × 80 = 960. FTEs: 960 ÷ 120 = 8. Total: 42 + 8 = 50. On those numbers, the shop would count as an ALE for the next year. Check your real counts with a tax adviser.
How a Section 125 cafeteria plan saves taxes
A cafeteria plan lets employees pay for certain benefits before taxes. IRS Publication 15-B (2026) says a cafeteria plan “provides participants an opportunity to receive qualified benefits on a pre-tax basis.” Qualified benefits include:
- Accident and health benefits (but not Archer MSAs or long-term care insurance)
- Adoption assistance
- Dependent care assistance
- Group-term life insurance coverage
- Health savings accounts (HSAs)
Excluded benefits generally are not subject to federal income tax withholding, Social Security or Medicare tax. For plan years beginning in 2026, health FSA salary reductions are capped at $3,400.
Hypothetical example. An employee earns $50,000 and pays $200 a month toward health coverage through a cafeteria plan. That is $200 × 12 = $2,400 a year. Wages subject to those taxes drop from $50,000 to $47,600. The employer also avoids its share of payroll tax on the $2,400.
Group term life and the $50,000 rule
Employer-paid group term life is one of the simplest employee benefits to add. Under Publication 15-B, the cost of up to $50,000 of coverage is generally tax-free to the employee. The IRS cost of coverage above $50,000, from its age-based Table 2-2, goes into the employee’s wages and is subject to Social Security and Medicare taxes.
Hypothetical example. A 47-year-old has $100,000 of employer-paid coverage. The excess is $50,000, or 50 units of $1,000. The IRS cost for ages 45 to 49 is $0.15 per $1,000 per month. Imputed income: 50 × $0.15 × 12 = $90 a year.
For the full age table, portability and conversion, see our group life and health insurance guide.
Voluntary benefits at no employer cost
You can offer coverage without paying any premium. Employees choose what they want and pay through payroll deduction. Department of Labor rules at 29 CFR 2510.3-1(j) describe when such a program is not treated as an ERISA employee benefit plan. All four conditions must be met:
- The employer makes no contributions.
- Participation is completely voluntary.
- The employer only lets the insurer publicize the program, without endorsing it, and collects and sends in premiums through payroll deduction.
- The employer gets no payment beyond reasonable pay for payroll work, with no profit.
Common voluntary choices include supplemental life, accident, hospital indemnity and critical illness coverage. Whether a program meets these conditions is a legal question, so ask your benefits counsel.
Voluntary plans are a practical first step for a business that cannot yet fund a full package. Employees get access to group pricing and payroll convenience. You can add employer-paid employee benefits later, such as basic group term life, when the budget allows. If you do start paying part of the premium, the no-contribution condition above no longer applies, so review the plan’s legal status at that point.
How to start an employee benefits program
- Count your workforce. Use the IRS full-time and FTE method above to see whether you are an ALE.
- Set a budget. Decide what you will pay and what employees will pay.
- Ask employees what they value. Health, retirement, life and paid leave rank high in the BLS data.
- Look at tax help. The Small Business Health Care Tax Credit may apply if you have fewer than 25 FTEs, pay at least half of employee-only premiums and buy through the SHOP Marketplace. It can be up to 50% of premiums (35% for tax-exempt employers) for two consecutive years.
- Set up a cafeteria plan so employee shares can be paid pre-tax.
- Add group term life, then layer voluntary options on top.
- Review every year as your headcount changes.
Once the plan is in place, explain it clearly. Give each employee a short summary of what the company pays, what they pay, and the enrollment deadline. Remind them to name a beneficiary for any group life coverage. Keep copies of plan documents and payroll deduction records together, since you will need them at renewal and at tax time.
A licensed agent can quote group life and voluntary coverage side by side so you can compare costs before you commit.
Which Employee Benefits Can Octans Help You Offer?
Small and mid-sized employers often combine several group benefits to attract and keep staff. This overview shows how common options compare.
| Benefit | What it covers | Who usually pays |
|---|---|---|
| Group term life | A death benefit, often 1 to 2 times salary | Employer, with optional employee buy-up |
| Supplemental life | Extra coverage above the group amount | Employee, through payroll deduction |
| AD&D | Accidental death and serious injury | Employer or employee |
| Supplemental health | Cash benefits for accidents, hospital stays, or critical illness | Usually employee |
| Disability income | Part of income if an employee cannot work | Employer or employee |
Related: Accidental death and dismemberment (AD&D) coverage.
Employee Benefits FAQ
What employee benefits can a small business offer?
Common options include group term life, voluntary life, accident, hospital indemnity, critical illness, and dental or vision coverage, depending on carrier and state.
How many employees do I need?
Many carriers offer group coverage to businesses with as few as two to five employees.
Can employees pay for some benefits themselves?
Yes. Voluntary benefits are paid by employees through payroll deduction, often at group rates.
Related Pages
Important: Octans Insurance agents are licensed in the states in which they operate. Coverage availability and rates may vary by state. Premium examples, when provided, are illustrative samples from published sources, not quotes. Final rates are determined by the insurance carrier based on underwriting and applicable policy criteria. Policy terms, exclusions, limitations, riders, and availability vary by carrier and state.